In most markets - be it stocks, bonds, or commodities- most participants never realize the market has topped until it's too late. But for banks and the rest of the nation's mortgage lenders, the signals are as clear as can be. If s becoming painfully evident that the current surge in housing activity probably represents the blow-off to a four-year party. The latest evidence: The Commerce Dept.'s May 26 report that sales of new single-family homes fell 11.896- the biggest monthly drop in a decade. Mortgage demand could decline even more sharply in coming months. Already, refinancing activity is down more than half from 2003's record pace. And overall mortgage originations could tumble 36.5% in 2004, to $2.4 trillion, and an additional 28% in 2005 as demand for housing cools and refis dry up, says Doug Duncan, chief economist for the Mortgage Bankers Assn. (MBA).
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